Tag Archives: serving notices

Landlord’s Offer Notices Under Section 5B of the Landlord and Tenant Act 1987

I recently wrote about this issue in an article that appeared in Landlord and Buy to Let Magazine, see:

http://www.joomag.com/magazine/landlord-buy-to-let-magazine/0540853001421676588?short

However, Section 5B is an issue that is worth considering, as this means that the freehold in your building will go to auction. You may (collectively) have the right of ‘first refusal’ against any successful bidder.

So, should you do anything about this?

The answer is, it depends. If the price is right then this may well be an ideal opportunity to buy out the freehold to your building, but to know this you may need valuation advice.

Secondly, the price will not be set until the auction and therefore, you may well need to attend to watch and see how the pricing is going. Generally you are better off not bidding, but if the property is sold in the room on the day then you will have the same right that any auction buyer will have – normally to complete the purchase within 28 days of the auction sale. It may be necessary to bid if the property will not reach its reserve.

Remember, this is a collective right and therefore a majority (more than 50%) of flat owners are needed. The next problem is that because you need to complete quickly at the end of the process, you will need all the funds in line before the auction date to be able to complete. You will not know the exact price until the sale room process is complete.

If you do want to go down this route, then the first step is to serve an acceptance notice (which needs more than 50%), there are then several other procedural steps to go through to protect your position. You will need a company (most likely) to be your purchase vehicle and there will be other notices to be served. In other words, you will definitely need professional assistance from a solicitor.

In practice, this route can be used successfully to buy your freehold, but it does require proper planning and preparation and may require one or more participants to ‘forward fund’ the exercise. If you would like to know more, or have a specific question, by all means do get in contact with me to discuss.

http://www.joomag.com/magazine/landlord-buy-to-let-magazine/0540853001421676588?short

 

Section 5A offer Notices under the Landlord and Tenant Act 1987

I was pleased to have an article published in the current edition of Landlord & Buy to Let Magazine on the subject of offer notices under the Landlord and Tenant Act 1987.

These often represent the chance to purchase your freehold collectively at a lower transactional cost and provided that the ‘price is right’ then these are often worth considering.

In order to accept and act collectively (as you need more than half of the flat owners to participate), you will need to move quickly as there are only 2 months to co-ordinate the initial response. If there are a large number of flats, then do not underestimate this challenge, although in practice we have experience of dealing with large-scale transactions (100 flats plus in a block) experience shows acting early is essential if you are to succeed.

To read the full article see:

http://www.joomag.com/magazine/landlord-buy-to-let-magazine/0540853001421676588?short

I served a Section 42 Notice but have not received a Counter Notice. What can I do?

If you have served a Notice and not received a Counter Notice in response by the due date, then the landlord is deemed to have admitted the premium that you proposed to pay in your Notice.

You should seek expert assistance, but can probably enforce the grant of the new lease at this level.

It may become necessary to apply to court in order to do this, and as there are certain time limits for doing so it would make sense to seek specialist help on this sooner rather than later.

You will also need to be able to demonstrate to the court that the Notice was in fact ‘served’ – i.e. proof of service will be required.

Serving notice under the 1993 Act – “It’s just filling in a few forms, right?”

As I explained in my recent talk, “Take No Notice” with Andrew Pridell of APA Associates at the ALEP Autumn Conference on 18 October 2011, serving notice under the Leasehold Reform Housing and Urban Development Act 1993, is not as easy as it seems.

This was a talk to other professionals at the ALEP (Association of Leasehold Enfranchisement Practitioners) Autumn Conference and although that talk was aimed at professionals (a full set of notes appears at leaseholdreformnews.com) there are a few points that anyone looking to engage with this area should bear in mind.

  • The notice must be signed personally by the qualifying flat owner. For instance, someone holding a power of attorney cannot sign on behalf of someone else.
  • A UK company is going to need to execute the notice as a deed. An overseas company will present different issues.
  • Any offer figure must be made in ‘good faith.’ This has a specific technical meaning and ideally therefore (although it is not mandatory) specialist valuation advice needs to be obtained.
  • Allocating any offer figure must be done correctly. This will involve consideration of technical issues such as additional freeholds, or other leasehold areas to be included in the claim. If there are other leasehold interests or superior (head) leases then this too needs careful consideration. The valuation and legal advisor will need to liaise closely.
  • The notice needs to be addressed to the correct parties. Once again this is technical and any slips will make the notice void. The list to be served may include other landlords and other parties. The right addresses for service are not always readily apparent.
  • Multiple signatures of a single notice may present significant legal issues particularly, if this is done without proper advice and supervision. Using a solicitor will almost certainly assist in the event of a challenge.

Bear in mind that if the notice is not served correctly that you will be liable for the landlord’s costs of investigating your claim and serving counter notice (legal and valuation) and you will have to start all over again. If your lease has slipped below a critical point (e.g. below 80 years), then irreparable damage may be done.

Similarly, in a collective claim where a large number of people have to sign a notice, if there is an invalid notice, vital impetus will be lost and the claim may take a long time to start going again. This is to say nothing of the possible expense and inconvenience of a court case investigating the notice if invalidity is not conceded.

Likewise, without the benefit of specialist help, where difficulties have arisen, those qualifying may actually withdraw a perfectly good claim – leading to the position that they cannot bring a fresh claim for another year.

For all of these reasons (amongst others) specialist help should always be sought. As such you should always use a firm of legal or valuation advisors with a proven track record in this area, such as an ALEP member.